In this blog post, we provide an overview of the updates to the Criminal Division’s Corporate Enforcement Policy (CEP) and discuss the impact of these changes on the corporate enforcement policies for criminal violations of sanctions and export controls, criminal violations of antitrust laws, and civil violations of the False Claim Act.
On January 17…
In a surprising break from past trends for US enforcement of the Foreign Corrupt Practices Act (FCPA), none of the five corporate enforcement actions resolved by the US Department of Justice (DOJ) in 2022, and only two of the six cases resolved by the Securities & Exchange Commission (SEC), involved Asia Pacific countries. Not so…
The Department of Justice (DOJ) “KleptoCapture” Task Force (the “Task Force”), launched shortly after Russia’s invasion of Ukraine earlier this year, is characterized by DOJ as a key part of the current Administration’s broader anti-corruption initiative. The role of the Task Force is to support the enforcement of sanctions and export control restrictions imposed against…
This year, we have witnessed an extraordinary set of coordinated economic sanctions and export control regulatory actions against Russia after its invasion of Ukraine. In contrast to the fast and furious pace of regulatory action, enforcement actions did not keep pace.
This year’s enforcement actions by the US Treasury Department’s Office of Foreign Assets Control (OFAC) are notable for their jurisdictional reach and expansion of liability theories that aren’t necessarily supported by the plain language of their regulatory authority. The Commerce Department’s Bureau of Industry & Security (BIS) enforcement actions have targeted the aerospace industry, especially in relation to Russia and Belarus. The Department of Justice (DOJ) expended much of its resources on seizing and forfeiting assets linked to Russian oligarchs, galvanizing its multilateral networks.
Interestingly, OFAC continued to target the Iranian petroleum and petrochemical sector despite news reports of intensive negotiations to revive the Joint Comprehensive Plan of Action (JCPOA).
Below we discuss some representative enforcement actions to date.…
Singapore has long been a regional banking and trading hub, but in recent years, as multinational companies in other sectors have moved their regional headquarters to Singapore, it is also emerging as a regional data hub. This shift has implications for companies involved in US compliance and investigation activities in the Asia-Pacific region. US authorities…
The Trump administration is considering a ban on US imports of Xinjiang-origin cotton and other products due to allegations of widespread forced labor. The scope of the possible restrictions has not been made public but credible reporting suggests that it could include cotton and tomato products from the Xinjiang Uyghur Autonomous Region (XUAR) or wider…
Global settlements, Part 5 of this series, require careful attention by counsel and parties in parallel proceedings. A global settlement may include just one settlement agreement, but is more likely to include multiple settlement agreements with different government agencies (including foreign ones) that are coordinated. The goal is to ensure that the overall impact of the settlement terms or penalties imposed is fair to each agency’s interests based on the specific circumstances of the enforcement action, but not ruinous to the company.
To ensure a good foundation for pursuing a global settlement, it is crucial to understand the topics covered in Parts 1-4 of this series:
As we previously noted, each agency has different authorities, powers, priorities, and timing; and all of these should be factored into the global settlement discussions. Continuous communication during the investigation can help identify each agency’s interests and priorities.…
Once multiple agencies are engaged in a US export control or sanctions enforcement action, or you’ve determined they should be, counsel should consider how to communicate with these agencies, both individually and together. Not only will such discussions provide valuable insight to guide the conduct of the internal investigation, it could provide information about the government investigation, and could also facilitate a global resolution. Part 4 of our series on parallel proceedings discusses why counsel might seek the role of communication coordinator amongst the agencies, and how and when to do so.
Which agencies might be involved in this communication were identified in Part 1 of our series on parallel proceedings. We discussed how the involvement of multiple agencies might impact the investigation in Part 2, and we provided guidance on voluntary self-disclosures (VSDs) to those agencies in Part 3. There are opportunities to engage with the relevant agencies at various points in the investigation, all of which should be considered and carefully structured.…
The FBI, in a leaked intelligence bulletin, has made a high-confidence assessment on the likely use of Private Investment Funds (PIFs) by “threat actors” for money laundering. Threat actors are defined in the FBI report as financially motivated criminals and foreign adversaries, and PIFs are defined to include hedge funds and private equity funds.
Of note, the FBI “assumes AML programs are not adequately designed to monitor and detect threat actors’ use of private investment funds to launder money.” The FBI’s assumption is based on open source reporting from DOJ, as well as intelligence from corroborated human and financial sources. The FBI also lists examples which highlight threat actors’ use of shell companies to launder money, and the failure of the PIFs’ standardized due diligence, if any, in establishing the source of funds. In one case, the FBI noted the involvement of a “former partner of a major US law firm” who “assisted others in laundering more than $400 million . . . through a series of purported private equity funds holding accounts at financial institutions . . . to conceal and disguise the nature, location, source, ownership, and control of the proceeds.”
While traditional US broker-dealer funds are required to have an anti-money laundering (AML) program, make Bank Secrecy Act filings, and perform customer due diligence, the FBI noted that these requirements are not mandated for PIFs, which are largely exempt from regulatory oversight by the Securities Exchange Commission and other federal financial regulatory authorities. As a result, even where PIFs had in place AML measures, the FBI assessed that money launderers could circumvent traditional AML programs.…
This third post in our parallel proceedings series discusses how to reconcile the conflicting requirements of making voluntary self-disclosures (VSDs) to multiple agencies. We listed the relevant agencies in our first post, all of whom may be interested in a VSD, depending on the potential violations. In our second post, we discussed how to structure an investigation that involves those agencies. While none of these agencies imposes an absolute requirement to voluntarily disclose a violation (with limited exceptions where disclosure is required), they all offer significant benefits for doing so.
Where more than one agency is involved, disclosure of violations to each of the relevant agencies should be done simultaneously, including the Department of Justice (DOJ) if there is or appears to be potential willfulness or intent. When making the decision to disclose, the company should also consider any potential violations in related subject areas (i.e., anti-money laundering, customs, or anti-bribery and corruption laws).…
